Value Added

Supply chains must reflect the new normal of volatility and disruption.

by Aaron Lazenby, November 2013

This summer, I spent some time with a handful of senior officers of a major telco in Asia. The conversations were ostensibly about the importance of customer experience in their competitive and mature industry. Topics such as multichannel service and single customer record dominated the agenda, but each executive—from the CIO to the CMO—eventually pointed to supply chain execution as an essential element of a superior customer experience.

“If a customer walks in and you do not have inventory on hand, then it’s a lost opportunity,” the CIO told me. “If it’s a new customer, that person probably won’t be coming back.”

This intersection of the supply chain and customer experience is just one example of disruptive business forces influencing traditional enterprise resource planning—such as procurement, order and inventory management, and manufacturing. For example:

New businesses, being created every day, have the potential to disrupt established supply chains. “The future state will be a digital battleground of nontraditional players...that will evolve into the dynamic supply web,” says Oracle’s Harshad Khatri (“Keeping Pace with the Game Changers”).

This supply web is also being expanded and reformulated to include new partnerships and increased collaboration. “You need an ecosystem with people focused in different areas. This allows you to specialize, scale up with what you’re particularly good at, and then partner with a lot of other entities,” says William D. Eggers, author of The Solution Revolution (“Doing Their Share”).

This increasing complexity is accompanied by a need to address increasing business risk—from known and unknown sources. “We saw this with the tsunami in Japan,” says Tony Perrigan, group vice president of Oracle’s Enterprise ERP Applications Group. “Supply chains were disrupted for several industries, which directly inpact the ability to deliver products and meet financial goals” (“Rising Tides”).